Shadow Chancellor George Osborne has defended Birmingham’s plans to axe 2,000 jobs - claiming Gordon Brown, and not the Tory-run city council, is to blame.

Mr Osborne claimed Government mismanagement of the economy was forcing local authorities including Birmingham to make cuts, as he visited the West Midlands to meet business leaders.

But the comments were condemned by Labour MP Khalid Mahmood (Lab Perry Barr) who said: “George Osborne clearly doesn’t have a clue what’s happening in Birmingham.”

Speaking as he visited Dudley, Stourbridge and the Wolverhampton, Osborne said a Conservative Government would back businesses including manufacturers in the West Midlands, and claimed Labour had relied on the banking and finance sector in the south.

He said: “The experiment Gordon Brown tried, of hitching the fortunes of Birmingham and the Black Country on the City of London, hasn’t worked.”

Earlier this week, he highlighted Tory plans to begin cutting the nation’s budget deficit as quickly as possible after the next election. The Treasury currently spends £178 billion more every year than it receives from taxes, and the difference has to be made up by borrowing.

Asked whether he backed cuts already being made by Tory-run Birmingham City Council, including the loss of 2,000 jobs, he said: “There are councils all over the country, Labour, Conservative and Liberal Democrat, who are having to make very difficult decisions because of the mess Gordon brown has created in the economy.

“The people responsible for this ultimately are the Labour cabinet in London.

“It is difficult for councils in the front line to have to take these very difficult decisions.”

Mr Mahmood pointed out that Birmingham had paid a recruitment agency the equivalent of £208,000 a year to hire a temporary “Director for Transforming Education” on a four-day week - and hired a former Sun journalist as a PR consultant to help defend its troubled child protection services.

The MP said: “Birmingham spent £60 million on consultants for its so-called business transformation project. It is bizarre to say the money hasn’t been there.”

Mr Osborne also sought to clear up confusion about Conservative plans for regional development agencies, the Government quangos responsible for supporting industry.

His party has suggested it may abolish them if it wins the next election, but the policy has been condemned by Birmingham Chamber of Commerce which argues the local agency, called Advantage West Midlands, provides essential support for employers.

But the Shadow Chancellor insisted a Conservative Government would not axe Advantage West Midlands if local businesses wanted it to stay.

He said: “We are not trying to set down a single way of doing things for every part of Britain.

“If business leaders would rather have a Regional Development Agency for the whole West Midlands, rather than an agency or partnership for a smaller area such as Birmingham and the Black Country, then that is what they will have.